Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Businesses risk fines for breaching new consumer law reforms

16 June 2014

Businesses risk hefty fines for breaching new consumer law reforms

Companies that don’t comply with new consumer law reform changes risk substantially increased fines and penalties for any breach. The changes, which come into effect today (June 17), will impact virtually all businesses dealing with consumers.

The updated legislation affects the Fair Trading Act 1986 and Consumer Guarantees Act 1993 and will be followed by further changes in March next year.

Richard Smith, a commercial law partner with Duncan Cotterill, says the changes relate to claims that companies make about goods and services, including online sales, and extend to facets such as delivery time post sale or auction. Plain English information on extended warranties is also required.

Backing up claims about goods and services
“Companies need to be able to back up claims that they make about their goods and services. Generally speaking, that means businesses must have reasonable grounds for believing every claim made about their products or services is true. Even if it later turns out that a claim made is true, a breach of the Fair Trading Act still occurs if proof is not obtained before the claim is made.”

Smith says the focus is on the steps taken to substantiate claims but there is no precise test. There is an exception for claims that “a reasonable person would not expect to be substantiated,” which is intended to cover those expressions of opinion that are so obviously exaggerated or overstated that they are unlikely to mislead anyone.

“To ensure on-going compliance, businesses should be reviewing and updating their approach to marketing, and making sure there is a step in the process for checking reasonable grounds are held for any claims being made.

“We suggest:
• Don’t make any claims about your product or service unless you have reasonable grounds for believing them to be true.
• Seek to rely on facts, figures and credible sources of information to back up representations – not guesses and opinion.
• Keep documentation recording the sources you use to back up your claims and of any representations made to customers.”

More changes to come
Smith says that further changes which will come into effect in mid March 2015 relate to any ‘unfair’ wording in consumer contracts. Terms in contracts deemed to be unfair will not be enforceable by businesses

“In the lead up, businesses should review all their standard form consumer contracts to identify any provisions that could potentially be considered unfair. This review could result in substantial changes needing to be made to existing forms of contract and businesses standard terms and conditions.”

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news